Re: BOM water & electricity (was: urgent) -- BPCS-L

I am in a totally different industry than you, so can only make a few
comments, hopefully helpful.

We also have components with no cost, such as where the customer supplies by
consignment some raw materials they want us to use.  We include this in our
BOM because we have to keep track of the inventory ... there is a lead time
for the customer to resupply us.

In your case you say that raw water is not to be charged so no costing is
required.
Billing the customer is a separate topic than your cost.
Water is not free in this country, although it is rather inexpensive.
We charge the customer based on grand total cost expected & a small profit
percent.
We include costs for everything that costs us, except where we lump it into
overhead.

We also have production in which precisely what happens is conditional on
some factors not known much in advance.

For example, if we are doing a large customer order of thousands of parts, it
is most efficient to do cutting machine that adds terminals, then certain
other operations, but if we doing much smaller run, it is more efficient to
use cutting machines a different way, then add the terminals in a later
operation.  The reason has to do with setup time.  We are exploring a variety
of ways to handle this, in which we do not yet have a consensus on the best
alternative.

You might consider alternate methods ... same part
standard method does not use chemical D
alternate method includes chemical D
unfortunately you have to know at time of order release which method
relevant, but if nothing reported to the order yet, you could kill it &
re-release on other method
This is what I had suggested for order size variations when high setup
overhead
We also looking at planning lot sizes based on setup cost

You may want to have a safety stock of chemical D
We traditionally have had safety stocks of some raw materials that have long
lead times, we now adding safety stocks of some work-in-progress that has
high setup costs, and we are looking at dynamic recalculation of safety stock
needs ... BPCS does this based on requirements, but in this case perhaps
historical data should tell you something more useful

Validating the Electrical Power Vendor may be a separate topic than
accounting for the power consumption in your BOM.  There is a very real
problem of being able to prove to the power company that they short changed
you & the data in your ERP is like Greek to them.  In our building the
electrical power flows to A LOT of stuff other than the factory machines,
such as the computers, lights, time cards, vending machines ... how do you
account for all of that ... sounds like diminishing returns to me.

Do you have some kind of Meter that measures the power flowing into your
facility, that the power company uses for billing purposes & can you have
that equipment periodically audited / inspected, independently of the power
company own people?

Once upon a time we put in our BOM that each end item would use 1/1000 of a
carton when we supposed to pack them 1000 to a carton (careful to round up)
when we thought we might try to use BOM to tell us when to get more shipping
cartons.  Due to variety in carton sizes & other factors, we eventually gave
this up as being not the smartest way to manage our supply of packing
materials.

> From: kikhlas@yahoo.com (Khawar Ikhlas)
>
>  Dear BPCS Implementers (manufacturing experts)
>
>  Your urgent response will be highly appreciated.  Thanks
>
>   Sweet Water Quatntity: 1 cu m
>
>   1.      Normal Condition
>
>   Material (Direct)            kg/cu m
>
>  Chemical A                   0.2130
>
>  Chemical B                   0.3450
>
>  Chemical C                   0.8000
>
>  * Raw Water is not to be charged therefore no costing is required.
>
>   * (Indirect)                    kw hr/ cu m
>
>  Electricity                     3.86900
>
>   2.      Severe Condition:
>
>  In case of algea formation and QC test a condition may trigger to use
> another chemical, wherein the operation will be halted and the chemical
will
> be used. This condition occur once a week.
>
>                                      Kg/cu m
>
>  Chemical D                   0.1111
>
>
>
>  Question: 1.
>
>  In this case where we do not know when Chemical D will be used, how the
> requirement is to be generated?
>
>
>
>
>
>  B. Power Generation:
>
>
>
>  The power produced will be through Generators to serve the plant and the
> admin building.
>
>
>
>  *Electricity BOM
>
>                          Liter/ kw hr
>
>  Fuel                              0.54568
>
>
>
>  Question: 2.
>
>  Will this be a part of our Normal BOM? as a sub component. or a separate
BOM,
>  no dependency on the desaline water BOM.
>
>  This is associated with the production of 1 cu m of desalinated water
>
>  o      Fuel requirments are to be generated and monitored.
>
>  o      The User is not interested to charge this to overhead.
>
>   Since there is requirement to monitor the power consumed by the plant
this
> is to validate the process guarantee  from the supplier.

MacWheel99@aol.com (Alister Wm Macintyre) (Al Mac)
BPCS 405 CD Manager / Programmer @ Global Wire Technologies Incorporated
http://www.globalwiretechnologies.com = new name same quality wire
engineering company: fax # 812-424-6838